Why does the University not implement the living wage?

Executive Question Time question that wasn’t addressed during the hour programme due to time restrictions:

 

QUESTION:
As more and more local and national employers, including universities move to paying the Living Wage, how does the University justify not paying the Living Wage in light of significant numbers of University staff earning in excess of £50K?

 

ANSWER:
Thank you for this question. The living wage is an hourly rate, set independently and updated annually. This currently stands at £7.65 per hour outside of London. A ‘Living Wage Employer’ agrees through a signed licence with the Living Wage Foundation, to pay all staff the living wage. Each November, the Living Wage Foundation announce the new hourly rate and accredited employers then have six months from the date of announcement to implement the rise. This is calculated by the Centre for Social Policy at Loughborough University. The living wage is not the same as the national minimum wage, the latter being legally enforceable. This stands at £6.31 per hour. According to the BBC approximately 140 employers have actually signed up to the living wage.

The University has kept under review the ‘Living wage’ debate. To put this into context, the living wage of £7.65 per hour is higher than the hourly rates of spinal points 1-4 inclusive. There are a number of issues with the Living Wage. Firstly, it does not recognise all of the different benefits that organisations may provide to staff – this will vary greatly from one employer to another – we as an employer have excellent terms and conditions including our final salary pension scheme. Secondly, we are part of the UCEA national pay bargaining negotiations. Therefore the salary levels on the pay spine are nationally agreed and are the outcome of these national discussions.

If we were to implement the living wage we would have UCEA/Unions determining the pay for one group of staff and the Centre for Social Policy at Loughborough University dictating this for other staff – which may cause problems if one inflator is higher than another. Finally, we often acknowledge that this region is one of the cheaper areas to live within the UK. The living wage is one rate for the whole of the UK which tries to cover the cost of living on a national basis – which of course will be different to the cost of living on a regional level, which in our case is almost certainly likely to be less.

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Why must we completely spend our budget each year?

QUESTION:
Why is there an impetus at the end of the budget year to spend the remainder of any such budget? Why can’t budget holders just give back, or get the difference added to next year’s budget, or get a bonus on next year’s budget for coming in under budget? Perhaps the way in which we spend budgetary money should come under a review?

 

ANSWER:
Departments should manage their expenditure in accordance with operational needs and budgetary constraints. This is monitored through the monthly finance returns and also quarterly business reviews.
They are expected to surrender budgets where they are surplus to needs and make a case for expenditure in excess of budget where necessary. Savings can then be used to fund additional expenditure where justified.
Ultimately, we all have a responsibility to generate income and manage our costs to create sufficient surpluses to enable the University to invest for the future.

*This is a question that unfortunately we did not have time for during the last Executive Question Time Event.